Now Is Good Time To Get Bills In Order

The growth of bills from spending can be so overwhelming that a common reaction is to do nothing which is the worst thing to do.

Consumers should take action to protect their credit, Virginia Tech Extension specialist Elaine D. Scott says, and listed what they should do.

First, list all the debts, regular monthly bills as well as the holiday bills. Add it up. If the total is more than the person can pay, even making minimum payments, the next step is to contact the creditors.

Second, write letters to all the creditors, and tell them what has happened. "Look at your budget and figure out how much you can pay," she says. "Suggest to the creditors how much you can pay and plan to make those payments."

Major creditors will usually be willing to accept what the consumer can pay, especially if the consumer has contacted them right away and plans to pay the whole debt over a period of time.

Scott warns consumers not to wait until they have missed a few payments. It is much better to work out a plan ahead and stick to it.

Major creditors also expect payment in proportion to their share of the consumers' outstanding debts. For example, if a person is in debt $1,000, and owes one department store $500, that store would expect 50 percent of the monthly amount the consumer is able to pay on all the debts.

"Items that already are on a regular payment schedule, such as car payments," probably will not be re-scheduled.